TORONTO, May 30, 2024 /CNW/ - CIBC (TSX:CM) (NYSE:CM) today announced its financial results for the second quarter ended April 30, 2024. Second quarter highlights Q2/24 Q2/23 (1) Q1/24 YoY Variance QoQVariance Revenue $6,164 million $5,704 million $6,221 million +8 % -1 % Reported Net Income $1,749 million $1,689 million $1,728 million +4 % +1 % Adjusted Net Income (2) $1,718 million $1,628 million $1,770 million +6 % -3 % Adjusted pre-provision, pre-tax earnings (2) $2,690 million $2,477 million $2,862 million +9 % -6 % Reported Diluted Earnings Per Share (EPS) $1.79 $1.76 $1.77 +2 % +1 % Adjusted Diluted EPS (2) $1.75 $1.70 $1.81 +3 % -3 % Reported Return on Common Shareholders' Equity (ROE) (3) 13.7 % 14.5 % 13.5 % Adjusted ROE (2) 13.4 % 13.9 % 13.8 % Net interest margin on average interest-earnings assets (3)(4) 1.46 % 1.54 % 1.43 % Net interest margin on average interest-earnings assets(excluding trading) (3)(4) 1.72 % 1.65 % 1.72 % Common Equity Tier 1 (CET1) Ratio (5) 13.1 % 11.9 % 13.0 % "In the second quarter, the steady execution of our client-focused strategy across our well-diversified North American platform continued to deliver solid results and create value for our stakeholders," said Victor G. Dodig, CIBC President and Chief Executive Officer. "Our team's ability to attract and deepen client relationships across our bank, including in high growth segments and markets is supporting our momentum. Combined with expense discipline, our robust capital position and disciplined risk management, as well as our ongoing strategic investments, we remain well positioned to navigate the current operating environment and position our bank for the future." Results for the second quarter of 2024 were affected by the following items of note aggregating to a positive impact of $0.04 per share: $13 million ($10 million after-tax) charge related to the special assessment imposed by the Federal Deposit Insurance Corporation (FDIC) on U.S. depository institutions, which impacted CIBC Bank USA (U.S. Commercial Banking and Wealth Management); $51 million recovery to income tax that will be eliminated by the substantive enactment of a Federal tax proposal to deny the dividends received deduction for banks(6) ($71 million tax equivalent basis (TEB) revenue and tax expense in Capital Markets and Direct Financial Services with offsets in Corporate and Other; $51 million tax recovery in Capital Markets and Direct Financial Services); and $14 million ($10 million after-tax) amortization of acquisition-related intangible assets. Our CET1 ratio(5) was 13.1% at April 30, 2024, compared with 13.0% at the end of the prior quarter. CIBC's leverage ratio(5) and liquidity coverage ratio(5) at April 30, 2024 were 4.3% and 129%, respectively. Core business performanceCanadian Personal and Business Banking reported net income of $649 million for the second quarter, up $11 million or 2% from the second quarter a year ago, primarily due to higher revenue driven by higher net interest margin, volume growth and the impact of an additional day in the current quarter, partially offset by a higher provision for credit losses and higher expenses. Adjusted pre-provision, pre-tax earnings(2) were $1,163 million, up $149 million from the second quarter a year ago, as higher revenue was partially offset by higher adjusted(2) non-interest expenses mainly due to higher spending on strategic initiatives, and higher employee-related and performance-based compensation. Canadian Commercial Banking and Wealth Management reported net income of $456 million for the second quarter, up $4 million or 1% from the second quarter a year ago, primarily due to higher revenue and a lower provision for credit losses, partially offset by higher expenses. The increase in revenue was due to higher fee-based revenue from market appreciation and higher commission revenue from increased client activity in wealth management. Commercial banking revenue was lower compared to the prior year due to lower deposit margins, partially offset by the impact of an additional day in the current quarter. The lower non-interest income experienced in commercial banking was a result of the reduction in the issuance of Bankers' Acceptances ahead of the expected cessation of Canadian Dollar Offered Rate (CDOR) and was largely offset by higher net interest income from a corresponding increase in loans. Expenses increased primarily due to higher performance-based compensation. Adjusted pre-provision, pre-tax earnings(2) were $664 million, up $1 million from the second quarter a year ago, as higher revenue in wealth management was largely offset by lower revenue in commercial banking. (1) Certain comparative amounts have been restated to reflect the adoption of IFRS 17 in the first quarter of 2024. For additional information, see Note 1 to the interim consolidated financial statements of our Report to Shareholders for the second quarter of 2024 available on SEDAR+ at www.sedarplus.com. (2) This measure is a non-GAAP measure. For additional information, see the "Non-GAAP measures" section, including the quantitative reconciliations of reported GAAP measures to: adjusted non-interest expenses and adjusted net income on pages 3 to 7; and adjusted pre-provision, pre-tax earnings on page 8. (3) Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found in the "Glossary" section of our Report to Shareholders for the second quarter of 2024 available on SEDAR+ at www.sedarplus.com. (4) Average balances are calculated as a weighted average of daily closing balances. (5) Our capital ratios are calculated pursuant to the Office of the Superintendent of Financial Institution's (OSFI's) Capital Adequacy Requirements (CAR) Guideline and the leverage ratio is calculated pursuant to OSFI's Leverage Requirements Guideline, all of which are based on the Basel Committee on Banking Supervision (BCBS) standards. The Basel III reforms related to market risk and credit valuation adjustments were implemented as of November 1, 2023. For additional information, see the "Capital management" and "Liquidity risk" sections of our Report to Shareholders for the second quarter of 2024 available on SEDAR+ at www.sedarplus.com. (6) This item of note reports the impact on consolidated income tax expense that will be subject to an adjustment to our reported results in the third quarter of 2024 because the Federal tax proposal to deny the dividends received deduction for banks was substantively enacted on May 28, 2024. The corresponding impact on TEB in Capital Markets and Direct Financial Services and Corporate and Other is also included in this item of note with no impact on the consolidated item of note.  U.S. Commercial Banking and Wealth Management reported net income of $93 million (US$69 million) for the second quarter, up $38 million (US$29 million or 73%) from the second quarter a year ago, primarily due to a lower provision for credit losses and higher revenue, partially offset by higher expenses. Adjusted pre-provision, pre-tax earnings(1) were $291 million (US$215 million), down $21 million (US$14 million) from the second quarter a year ago, as higher revenue was more than offset by higher expenses. Higher non-interest income was primarily due to market appreciation. Non-interest expenses increased mainly due to higher spending on strategic initiatives and higher performance-based and employee-related compensation. Capital Markets and Direct Financial Services reported net income of $560 million for the second quarter, up $63 million or 13% from the second quarter a year ago, primarily due to higher revenue from our global markets, investment banking and direct financial services businesses, partially offset by higher non-interest expenses. Expenses were up due to higher spending on strategic initiatives and higher performance-based and employee-related compensation. Adjusted pre-provision, pre-tax earnings(1) were up $13 million or 2% from the second quarter a year ago due to higher revenue, largely offset by higher expenses. Credit qualityProvision for credit losses was $514 million, up $76 million from the same quarter last year. Provision for credit losses on performing loans was up mainly due to a lower provision reversal in Canadian Personal and Business Banking, partially offset by lower provisions in U.S. Commercial Banking and Wealth Management. Provision for credit losses on impaired loans was up mainly due to higher provisions in U.S. Commercial Banking and Wealth Management, and Canadian Personal and Business Banking, partially offset by lower provisions in Canadian Commercial Banking and Wealth Management. (1) This measure is a non-GAAP measure. For additional information and a reconciliation of reported results to adjusted results, where applicable, see the "Non-GAAP measures" section. Non-GAAP measuresWe use a number of financial measures to assess the performance of our business lines as described below. Some measures are calculated in accordance with GAAP (International Financial Reporting Standards), while other measures do not have a standardized meaning under GAAP, and accordingly, these measures may not be comparable to similar measures used by other companies. Investors may find these non-GAAP measures, which include non-GAAP financial measures and non-GAAP ratios as defined in National Instrument 52-112 "Non-GAAP and Other Financial Measures Disclosure", useful in understanding how management views underlying business performance.      Management assesses results on a reported and adjusted basis and considers both as useful measures of performance. Adjusted measures, which include adjusted total revenue, adjusted provision for credit losses, adjusted non-interest expenses, adjusted income before income taxes, adjusted income taxes, adjusted net income and adjusted pre-provision, pre-tax earnings, remove items of note reported results to calculate our adjusted results. Adjusted measures represent non-GAAP measures. Non-GAAP ratios include an adjusted measure as one or more of their components. Non-GAAP ratios include adjusted diluted EPS, adjusted efficiency ratio, adjusted operating leverage, adjusted dividend payout ratio, adjusted return on common shareholders' equity and adjusted effective tax rate.      Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found in the "Non-GAAP measures" section of our Report to Shareholders for the second quarter of 2024 available on SEDAR+ at www.sedarplus.com. The following table provides a reconciliation of GAAP (reported) results to non-GAAP (adjusted) results on a segmented basis. U.S. Canadian U.S. Capital Commercial Canadian Commercial Commercial Markets Banking Personal Banking Banking and Direct and Wealth and Business and Wealth and Wealth Financial Corporate CIBC Management $ millions, for the three months ended April 30, 2024 Banking Management Management Services and Other Total (US$ millions) Operating results – reported Total revenue $ 2,476 $ 1,384 $ 666 $ 1,488 $ 150 $ 6,164 $ 489 Provision for credit losses 270 37 186 16 5 514 136 Non-interest expenses 1,319 720 396 706 360 3,501 290 Income (loss) before income taxes 887 627 84 766 (215) 2,149 63 Income taxes 238 171 (9) 206 (206) 400 (6) Net income (loss) 649 456 93 560 (9) 1,749 69 Net income attributable to non-controlling interests - - - - 10 10 - Net income (loss) attributable to equity shareholders 649 456 93 560 (19) 1,739 69 Diluted EPS ($) $ 1.79 Impact of items of note (1) Revenue Recovery to income tax that will be eliminated with the    substantive enactment of a Federal proposal to deny the     dividends received deductions for banks (2) $ - $ - $ - $ (71) $ 71 $ - $ - Impact of items of note on revenue - - - (71) 71 - - Non-interest expenses Amortization of acquisition-related intangible assets (6) - (8) - - (14) (6) Charge related to the special assessment imposed by the FDIC - - (13) - - (13) (10) Impact of items of note on non-interest expenses (6) - (21) - - (27) (16) Total pre-tax impact of items of note on net income 6 - 21 (71) 71 27 16 Income taxes Amortization of acquisition-related intangible assets 2 - 2 - - 4 2  Recovery to income tax that will be eliminated with the substantive   enactment of a Federal proposal to deny the dividends received      deduction for banks (2) - - - (20) 71 51 - Charge related to the special assessment imposed by the FDIC - - 3 - - 3 2 Impact of items of note on income taxes 2 - 5 (20) 71 58 4 Total after-tax impact of items of note on net income $ 4 $ - $ 16 $ (51) $ - $ (31) $ 12 Impact of items of note on diluted EPS ($) (3) $ (0.04) Operating results – adjusted (4) Total revenue – adjusted (5) $ 2,476 $ 1,384 $ 666 $ 1,417 $ 221 $ 6,164 $ 489 Provision for credit losses – adjusted 270 37 186 16 5 514 136 Non-interest expenses – adjusted 1,313 720 375 706 360 3,474 274 Income (loss) before income taxes – adjusted 893 627 105 695 (144) 2,176 79 Income taxes – adjusted 240 171 (4) 186 (135) 458 (2) Net income (loss) – adjusted 653 456 109 509 (9) 1,718 81 Net income attributable to non-controlling interests – adjusted - - - - 10 10 - Net income (loss) attributable to equity shareholders – adjusted 653 456 109 509 (19) 1,708 81 Adjusted diluted EPS ($) $ 1.75 (1) Items of note are removed from reported results to calculate adjusted results. (2) This item of note reports the impact on consolidated income tax expense that will be subject to an adjustment to our reported results in the third quarter of 2024 because the Federal tax proposal to deny the dividends received deduction for banks was substantively enacted on May 28, 2024. The corresponding impact on TEB in Capital Markets and Direct Financial Services and Corporate and Other is also included in this item of note with no impact on the consolidated item of note. (3) Includes the impact of rounding differences between diluted EPS and adjusted diluted EPS. (4) Adjusted to exclude the impact of items of note. Adjusted measures are non-GAAP measures. (5) CIBC total results excludes a TEB adjustment of $71 million for the quarter ended April 30, 2024 (January 31, 2024: $68 million; April 30, 2023: $64 million) and $139 million for the six months ended April 30, 2024 (April 30, 2023: $126 million). (6) Certain comparative amounts have been restated to reflect the adoption of IFRS 17 in the first quarter of 2024. For additional information, see Note 1 to the interim consolidated financial statements of our Report to Shareholders for the second quarter of 2024 available on SEDAR+ at www.sedarplus.com. (7) Relates to the net legal provisions recognized in the first and second quarters of 2023. (8) The income tax charge is comprised of $510 million for the present value of the estimated amount of the Canada Recovery Dividend (CRD) tax of $555 million, and a charge of $35 million related to the fiscal 2022 impact of the 1.5% increase in the tax rate applied to taxable income of certain bank and insurance entities in excess of $100 million for periods after April 2022. The discount of $45 million on the CRD tax accretes over the four-year payment period from initial recognition.   The following table provides a reconciliation of GAAP (reported) results to non-GAAP (adjusted) results on a segmented basis. U.S. Canadian U.S. Capital Commercial Canadian Commercial Commercial Markets Banking Personal Banking Banking and Direct and Wealth and Business and Wealth and Wealth Financial Corporate CIBC Management $ millions, for the three months ended January 31, 2024 Banking Management Management Services and Other Total (US$ millions) Operating results – reported Total revenue $ 2,497 $ 1,374 $ 681 $ 1,561 $ 108 $ 6,221 $ 507 Provision for (reversal of) credit losses 329 20 244 8 (16) 585 182 Non-interest expenses 1,280 669 478 712 326 3,465 356 Income (loss) before income taxes 888 685 (41) 841 (202) 2,171 (31) Income taxes 238 187 (32) 229 (179) 443 (24) Net income (loss) 650 498 (9) 612 (23) 1,728 (7) Net income attributable to non-controlling interests - - - - 12 12 - Net income (loss) attributable to equity shareholders 650 498 (9) 612 (35) 1,716 (7) Diluted EPS ($) $ 1.77 Impact of items of note (1) Revenue Recovery to income tax that will be eliminated with the substantive   enactment of a Federal proposal to deny the dividends received      deduction for banks (2) $ - $ - $ - $ (52) $ 52 $ - $ - Impact of items of note on revenue - - - (52) 52 - - Non-interest expenses Amortization of acquisition-related intangible assets (7) - (8) - - (15) (6) Charge related to the special assessment imposed by the FDIC - - (91) - -